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Nigerian Treasury Bills: Learn everything about Tbills

Nigerian Treasury Bills: Learn everything about Tbills

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dividend, MONEY, NAIRA - Nigerian Treasury Bills

This article explains how to invest in Nigerian Treasury Bills

  • A beginner guide to investing in treasury bills.
  • Water-down explanation of treasury bills and how to invest in it.
  • Quick tips on how interest is earned and when it is paid to an investor.
  • A run-down on benefits of investing in treasury bills

What are Treasury Bills?

Treasury Bills are government guaranteed debt instruments issued by CBN on their behalf to finance expenditure. The CBN also uses treasury bills to control money supply in the economy.

How are Treasury Bills Sold?

Treasury Bills are sold through a bi-weekly auction conducted by the CBN. Buyers are requested to quote bids following which the average minimum bid is selected.

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Where can I buy Treasury Bills?

Treasury Bills can be bought through any official dealer. The easiest this days are through banks’ treasury bill mobile application. A typical example is the Sterling Bank’s i-invest.

What is the Minimum Amount I can Buy?

Before, you could buy for as low as N10,000 and in multiples of N1,000 thereafter. However, this was increased to N50,000,001 in 2017. This article explains how you can buy treasury bills if you do not have up to N50 million. Though, the minimum for the i-invest mobile application is N100,000.

When is it usually sold?

Treasury Bills is sold every other Wednesday (bi-weekly) as announced by the CBN. The CBN announces issuances in their websites and in the pages of national dailies. You can also ask your bank account officer to notify you ahead of an issuance.

GTBank 728 x 90

How Can I Buy Treasury Bills?

To buy Treasury Bills you will have to approach your bank requesting for a form. You fill the form with your personal information also indicating the amount you want to buy as well has your bid rate.

With the advent of banks’ treasury bills mobile application, you are only required to fill a signup form once.

BONUS: Follow link to use Nairametrics’ treasury bills calculator

treasury bills calculator

What is the bid rate?

The bid rate otherwise called your STOP RATE is the likely interest rate that you have indicated to receive for the principal that you investing in the TB’s. For example you can indicate an interest rate of 10% as your expected rate. Your bid rate will most likely be different from that of other intending buyers of TB’s.

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How is the Bid Rate selected?

The CBN selects the bids that fall below the accepted marginal rates. The Marginal Rate is the minimum average rate for bids submitted within a bid window.  For example, if the marginal bid rate for a bid opened Wednesday 27 June is 11% then bids falling below this rate will be accepted and those above rejected.

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[Read Also: This is how to bid for the second Treasury Bills Sale of 2019]

What if I don’t have a Bid rate?

If you do not have a Stop Rate or you are not sure of a rate you can select the option of having the bank choose a rate for you. However, this does not guarantee that the bank rate will be chosen or will be the best.

Can I still buy if my Bid is rejected?

You can purchase TB’s from the secondary market Over The Counter (OTC) through a broker. This is also where buyers and sellers of TB’s trade the notes in exchange for cash.

What are the durations (tenor) for the TB’s?

Treasury Bills are usually for 91 days, 182 days and 364 days. As such, you can have the CBN hold your cash for 91 days, 182 days or 364 days, depending on your choice. However, the CBN can decide they want to sell Treasury Bills for all the tenor available or either of them.

BONUS: Follow link to use Nairametrics’ treasury bills calculator

app

treasury bills calculator

Can I sell before Maturity?

Yes, you can sell Treasury Bills before maturity. As mentioned above, this can be done through the OTC market. The price at which you sell depends on the forces of demand and supply. For example a N100,000 face value TB maybe selling for less or more depending on the yield expectation of the buyers. If your face value is trading at a higher price, it means you can sell your treasury bills at a profit as such your N100,000 can sell for N101,000 or more. If your face value is trading at a lower price, it means you can sell your treasury bills at a loss as such your N100,000 can sell for N99,000 or less.

When is the interest paid?

The interest element of a treasury bill is paid to you upfront and credited to your bank account. For example, if you purchase a N100,000 TB with an interest rate of 10% the CBN debits your account with N90,000 as such your N10,000 interest is paid upfront. Upon maturity, you are paid the face value N100,000. The upfront payment of your interest makes your true yield actually higher.

What is a True Yield?

True Yield is your actual Return on Investment. (ROI). Using the example above, the initial yield for the N100,000 is 10%. However, because they pay you interest upfront your true yield is actually the N10,000 in interest divided by the N90,000 actually deducted from your account. That is N10,000/N90,000 or 11.11%. This is, thus, higher than the 10% coupon. The True Yield is completely earned when you hold to maturity.

Can I roll over my investment?

The CBN does not rollover your investment automatically. However, you can give your bank a mandate to rollover the principal on your treasury bill upon maturity. You can also get the benefit of compounding interest by asking your bank to reinvest the interest portion of your TB once it is paid.

Are Treasury Bills Safe?

Treasury Bills are one of the safest forms of investment and are backed by the full faith and credit of the Federal Government of Nigeria.

BONUS: Follow link to use Nairametrics’ treasury bills calculator

treasury bills calculator

Apart from the Interest Rates, what are the benefits?

  • A good source of steady stream of income.
  • Treasury Bills are a good investment outlet for your free and disposable cash.
  • Treasury Bills are good investments for people who wish to save.
  • Treasury Bills are also tax free.
  • Treasury Bills are very liquid and can be converted to cash quickly.
  • They can be used as a collateral.

Are Treasury Bills Taxable?

Interest derivable from Treasury Bills are not taxable.

 BONUS: Follow link to short video on Treasury Bills

 

Nairametrics Research team tracks, collates, maintains and manages a rich database of macro-economic and micro-economic data from Nigeria and Africa. Our analysts share some of the data collated on Nairametrics, using formats such as docs, tables and charts etc. The team also publishes research based analysis as articles on a regular basis.

128 Comments

128 Comments

  1. Hafiz Adewuyi

    February 25, 2014 at 9:51 pm

    Hello Ugo,

    Thank you for this article.

    Please, I have a question. Do banks usually reduce the interest rate chosen by CBN after the bid before passing it on to their customers?

    • Ugodre

      February 27, 2014 at 5:13 am

      They don’t unilaterally reduce it. They just choose the average bids submitted by all banks. So if your bank bidder higher than the average, they lose out. Cheers

  2. Chijioke

    May 28, 2014 at 4:05 pm

    Pls I heard the interest is calculated per annum irrespective of the tenure you buy for eg, i buy 100,000 for 91days at an interest of 10percent, what will i get after the 91days?

    • Ugodre

      May 30, 2014 at 5:35 am

      You will get N2500

  3. yinka

    June 24, 2014 at 7:37 pm

    Please can I stop the treasury bills any time I like, in case I need my money 4 something important. Thanks

    • Ugodre

      June 24, 2014 at 8:27 pm

      Yes you can. Just approach your bank and tell them you want to sell. But be ready to get a lower amount as they will deduct part of the interest already paid to you upfront. Regards

  4. yinka

    June 26, 2014 at 9:39 am

    Thanks Ugo. Please is it part of the interest they will remove the money from. Thanks

    • marcus

      July 22, 2016 at 10:42 am

      Pls am in this same delima here; is it only the interest they would remove or even the capital invested???

  5. Isaiah Ogunseye

    January 15, 2015 at 1:01 pm

    I only want to thank you for this wonderful site. I have been looking for explanation on treasure bills and govt bonds. I now have insight on what they represent. Thank you again. Keep it up.

  6. ObumDave

    February 2, 2015 at 8:51 am

    Ugo, i really appreciate this expository narrative on TB. Keep up the good work.

  7. Mr Ben

    March 14, 2015 at 2:26 am

    Hello ugi,interesting piece..my question on TBs is does the duration affect the rate of interest and expected yield on it?the interest rate on a 91day period same as,364dys?

    • Nairametrics

      March 14, 2015 at 8:28 am

      Yes it does

  8. okenna

    August 5, 2015 at 6:16 pm

    Thanks for all the explanation. My question is if my interest bid in bonds fail to be accepted, can I still have my cash back .

    • Nairametrics

      August 5, 2015 at 6:21 pm

      Your cash won’t even leave your account. The cash only leaves your account if your bid is accepted

  9. Akin |Tunde

    April 26, 2016 at 6:02 pm

    i want to have clear understanding on returns in investing in treasury bills, particularly how the rate is applied for 91days, 182 days and the rest.Also which is better in terms of return(fix deposit or treasury bill).

    Tunde

  10. Edah Gabriel

    July 22, 2016 at 5:59 am

    I bought the 364 days treasury bills as at March when the interest rate was less than 10%. Now I do not want to hold the bills till maturity because the rate is now higher. What steps do I need to take to get my money back in order to re-invest at higher interest rate?

    • marcus

      July 22, 2016 at 10:48 am

      I am in the same problem. I am ready to let go of the profit if they won’t touch my capital invested. I bought for 12% rate and wouldn’t mind selling for same rate if they wont touch my capital invested. Pls advice.

      • Nairametrics

        July 23, 2016 at 1:23 pm

        They will return your capital and will pay you your interest upfront.

        • Anonymous

          January 20, 2017 at 8:12 am

          Please there is NO SUCH THING as UPFRONT INTEREST, stop misleading people. If you are investing 900k to get 1m you cannot say you have earned 100k interest please. You earn the interest over the tenor of the investment, PLEASE PLEASE AND PLEASE AGAIN NO INTEREST UPFRONT.

          • Anonymous

            October 17, 2018 at 3:49 pm

            Of course, that is what nairametrics meant. It was a simple explanation that was well broken down. You are over-analyzing it

    • Nairametrics

      July 23, 2016 at 1:27 pm

      This is quite simple. Approach your bank and tell them you want to sell. They will pay you back your capital and deduct the portion of your interest earlier paid to you that is yet to mature. So for example, you invest N1million and 10% for one year. Assuming you went for a 1 year maturity, the CBN will deduct N900k from your bank and pay you N100k upfront as interest. After one year, they credit your bank account with N1m meaning you get a total of N1.1m and gained N100k. Now assuming you decide to hold for only 6 months, the bank will pay you back N950k instead of N1m. So you get in total N100k (collected earlier) plus N950 paid in six months. In total that is one million fifty thousand naira only. Your gain is N50k. Hope this explains it.

      • Olanle

        April 27, 2017 at 12:21 pm

        Hmm, are you sure there are no further deductions by the bank. Things like commission on transaction etc. Because they would usually make some deductions even on the interest paid by CBN.

      • Joseph

        October 4, 2019 at 10:13 am

        For the 6 month, I beg to differ,

        For the N1m investment @ 10% for 6 months, customer will be debited N1m, and paid an upfront interest of N50k (technically he parted with N950k).
        Upon maturity, he is paid N1m.
        In total, a gain of 50k.

        Note: the bank still pays N1m upon maturity, just like in the case of 1 year investment.

  11. Adetoye

    August 13, 2016 at 1:30 am

    This is such a wonderful and life changing tutorial on treasury bills and bonds. Is this all it takes to start investing in treasury bills or there are still more to do?
    Thanks

  12. Tony

    September 8, 2016 at 2:09 pm

    I have 2 questions. Is it possible to hold the upfront interest to maturity date and what is the implication of doing this on the interest rate.
    Could you please give a sample letter with reinvesting upfront interest to bank to purchase treasury bill assuming you are out of the country.

    Thanks for all you do.

    • Nairametrics

      September 8, 2016 at 4:13 pm

      Upfront interest cannot be held back except you reinvest it in a new issue.

      • Anonymous

        September 12, 2016 at 3:09 pm

        Thank you.

      • The Ejirospecial

        December 28, 2018 at 9:39 am

        In my own understanding, the best way to reinvest your upfront interest is to include it in your initial investment. e.g. if your capital is 1m at 10%, which is 100k for a year, you can then buy TB of 1.1m instead of the 1m. Now, if you are buy TB of 1.1m at the above percent, only 990k will be deducted from your account. I HOPE THIS IS CLEAR

        • Nonso

          May 25, 2019 at 6:32 am

          Wow. @Ejirospeciap Yes yes yes it is clear. This is wisdom from financial experts.

  13. Olayinka kayode

    September 8, 2016 at 6:38 pm

    Is the percentage of bill rate are same in all banks?

    • Nairametrics

      September 8, 2016 at 11:24 pm

      No it is not

  14. Mikkel

    April 8, 2017 at 1:41 pm

    Pls my question is,if I invest 1. m for instance for a period of one year, the 100k interest is it for the monthly bases or its the interest for the whole year?thanks

    • Nairametrics

      April 8, 2017 at 4:19 pm

      Interest is for the whole year, not monthly.

  15. Dee

    May 17, 2017 at 6:39 pm

    Please is it advice able to invest in TBC now and what is the minimum amount ?

    Thanks

  16. xidaow

    August 21, 2017 at 3:01 pm

    Plz, investing in TB through the banks or through the stockbroker, which is advantageous to the investor?

  17. nlabdil

    September 18, 2017 at 11:41 am

    Thank you very much for this article, it was helpful. please how is the interest calculation being done?

  18. Innocent James

    October 1, 2017 at 4:03 am

    Thanks for the article it’s cleared some doubt & ignorance on NTB.

    Question:
    When can one invest in Nigerian TB?

  19. Anonymous

    October 13, 2017 at 4:53 pm

    what is the smallest amount that i can invest?

  20. Lanre

    October 13, 2017 at 4:56 pm

    What is the smallest amount that one can invest in Nigeria TB?

    • Nairametrics

      October 13, 2017 at 5:33 pm

      Officially its about N50 million. But your bank could accept as little as N100k

  21. Anonymous

    October 27, 2017 at 3:24 pm

    Thanks so much for this article. I have learned much.

  22. Toju Daniels

    November 23, 2017 at 3:09 pm

    Thanks for bringing back comments.

  23. Annonymous

    December 9, 2017 at 1:06 pm

    can one buy treasury bills in foreign currencies like dollars, pounds or euro?

    • Nairametrics

      December 9, 2017 at 4:14 pm

      It is only sold in Naira

  24. Mose

    December 18, 2017 at 10:10 pm

    Pls I want you to clear me on this when you say 100k is 2500 for 91days.is the 10% par annual or for 91days,,thanks

    • Anonymous

      February 5, 2019 at 11:22 am

      so 100k for 91 days at 10%, what he did is 10% will be 0.1 multiply by 100k = 10,000 thats for one year because its 91 days, as we know 91 days is just 3 month and how many 3 month are there in 1 year = 4 you divide 4 by that 10,000 giving you 2,500 for every 3month in 1 year.

      hope i am clear

      • Anonymous

        May 27, 2019 at 10:54 am

        Perfectly explained

  25. goldenson

    December 20, 2017 at 12:54 am

    Thanks very much.

    Please i need a long time investment like 2 years with better interest please which investment should i go into that has a better attractive interest ?

    • Favour

      January 15, 2019 at 11:31 am

      Go for Aiico insurance fixed deposit plan,the interest rate is 10% too , without vat and with free life insurance cover

  26. Onuoha Agwu Onuoha

    January 16, 2018 at 8:43 pm

    Thanks so much but I got a little confused when you said the return for 100k for 91 days is 2500k. Kindly explain further.

  27. Chibuzor Gerald

    February 2, 2018 at 4:58 am

    Good day, pls I invested 1m, for 91 days at 10%, i was expecting a deduction o 900k from my account, instead i was debited about 972k. Can yoj please help me understand this. Or do i need to go back to the bank? Thank you.

    • David Abaniwonda

      March 16, 2018 at 5:47 pm

      It is calculate Principal X Rate X time. In your case. it is 1,000,000 X 0.1(10%) X 0.2493(91/365)

  28. Esebile

    February 10, 2018 at 12:02 am

    Well done. Appreciated!

  29. Adebisi jaiyesimi

    February 22, 2018 at 12:03 am

    If I invest #10m for 91days @ 10%. What will be my actual amount.

    • Nairametrics

      February 22, 2018 at 8:46 am

      You will get N250k gross of any charges.

      • Temitope Omowumi

        July 2, 2018 at 4:48 pm

        Can you make a spreadsheet for calculating this?

        • Anonymous

          November 2, 2018 at 4:05 pm

          N10,000,000 * 0.12 (12%) * 0.2493 (91/365)
          =N249,300

  30. Adewumi

    March 2, 2018 at 9:43 pm

    My question is if I do a 91days treasury, before maturity can I do another one with the same account

    • Nairametrics

      March 2, 2018 at 10:29 pm

      We do not understand your question. Kindly rephrase

      • Hope

        August 13, 2018 at 8:59 pm

        Yes u can.but u will have different maturity dates and different investment letters.

    • Anonymous

      October 14, 2018 at 12:41 pm

      i think what determine the interest rate is the duration of your investment, the higher the duration, the higher your interest rate

  31. Folabi

    March 4, 2018 at 5:06 pm

    Many thanks for the site admin. I’m thinking of initial investment of about N500,000 and monthly addition of about N50,000 in T.B. Can this work out?

    • Nairametrics

      March 4, 2018 at 11:01 pm

      Yes it can work out

  32. Stan

    March 10, 2018 at 6:38 am

    What is the current interest rate of treasury bill

  33. Layo

    March 20, 2018 at 6:20 am

    If I invest in treasury bill of 182 days , are Saturday s and Sunday counted , how can I determine the end of 182 days .

  34. Fola

    April 6, 2018 at 11:36 pm

    Dear Admin, if I invest N1m in TB, can I tell my bank to roll the capital and gain over continuously for many years up to about 5 years?

    • Nairametrics

      April 7, 2018 at 8:54 am

      Yes, you can…though you might have to instruct them in a letter.

  35. Anonymous

    April 24, 2018 at 3:47 am

    How do I get a quick acceptation from TB

  36. Duru Nicodemus

    April 29, 2018 at 5:25 pm

    All Nigerian investment has a twist! From posts above, If one invests 1m for 91 days @10% and make 25k and another 10m to make 250k after all charges, then the TB business is a waste! The actual ROI is not 100k nor 1,000,000 but 25k and 250k respectively after all charge deductions (a paultey 25%) while a whooping 75% is lost to bank charges!

    • Emma

      May 4, 2018 at 11:00 am

      Well, you got your calculation all wrong. I bought treasury bills of 5 million naira in 2017 and i just received my capital in 2018 after 343 days. The interest of 822,260 was paid upfront and after i got my 5m in 2018, 0.09% which was 4228 was deducted. That’s all. Treasury bills is the best investment i”d advise anyone to go for. The percentage was 17.5 from diamond bank.
      Contact me if you need further help charlesnwanko@gmail.com

  37. Anonymous

    May 4, 2018 at 10:39 am

    my TB was charge .. with up to 48k

  38. Michael Kingsley

    May 18, 2018 at 11:26 am

    Thanks for this article.

  39. David

    June 2, 2018 at 12:35 am

    Pls can u explain futher on the bidrate works. For example if I select a bit rate of 10% and the % selected was 17.5% will I get interest based on my selection or on what the market is (17.5%)

    When u invest for a tenor say 91days do u still have to monitor ur tb withing that period or wait till the end of the tenor.

  40. David

    June 2, 2018 at 12:40 am

    Thanks for the insight

  41. Tinuoye

    June 18, 2018 at 9:28 am

    Sir, please is there any official document to be filled before I can invest in treasury bill ?

  42. Nomso

    June 19, 2018 at 2:50 pm

    Sir, am still not clear with this. Lets say i want to invest 100k for 91 days, how will it be processed, what will be my interest after 91days. What will be the charges associatedand how can i access the funds.

  43. Anonymous

    June 24, 2018 at 5:30 pm

    Pls if I have 2m for 182days how much will DAT be

  44. Anonymous

    July 17, 2018 at 11:10 am

    Thank you very much for this write-up. I understand all your explanations clearly. However my question is “how can someone lose money or investment with TB?” , The risk , Dos and Don’ts

  45. Olabode

    July 17, 2018 at 1:51 pm

    I understand the explanations clearly. However, what are the possible ways someone lose money(or all the investment) with TB?

  46. Mariagoretti

    August 2, 2018 at 3:27 am

    Thank you for the article.please help a sister,I booked treasury bill of 370,000 with one of the new generation banks on monday 9th July 2018 and I recieve a debit alert of 351,000 for the treasury bill on thursday 19th July 2018 instead of the previous day wednesday which is the normal day for biding treasury bill,mean while i have 371,690.40.the difference is 20,600.95.then I was confused because expecting something like 37,000 or more.Then I called their customer care no and they told me that the 20,600.95 is my interest .but as at wednesday 18th July 2018 treasurybill interest rate was between 10.5 & 11.5%.My first question is at what interest rate did they book me and secondly does bank take their on share from customers interest.please help me I am confuse.note I booked for 6 months.Sorry for the long comment.
    Thanks

    • Anonymous

      August 30, 2018 at 7:13 pm

      Ma, the 10.5 & 11.5 you quoted is for full year. You booked 6 months that implies your interest would be half of 10.5 or 11.5 depending on the rate your bank uses. Treasury bill is a discounted instrument hence interest is paid upfront so that you get the face value at maturity

  47. sandra

    August 13, 2018 at 3:42 pm

    please i booked 370,000 on 13th July for 67days. i cant really remember the percentage now but up to 365,000 was deducted from my account. i want to know where i can be getting information on Treasury bills to know when the interest rate increase or decrease

  48. Anonymous

    August 21, 2018 at 7:58 am

    I invest in this august 15,2018.with 600000 am expecting them to move 540000 they move 587400 pls why?

  49. Anonymous

    August 21, 2018 at 8:11 am

    I invest this August 15 2018 for treasury bills with 600000 I expecting them to move 540000 they moved 587400 pls why I want to know.

  50. Frank

    August 28, 2018 at 9:49 pm

    Guys the 10% or whichever % they offer is actually calculated for a 1 year(12months or 364days) period. This means whatever % you are expecting is spread through the aforementioned period. For example your 10% interest is spread through the 364days, thus giving you about 0.027% per day…Hence, 91days gives 91×0.027 = 2.457%; 182days = 4.99% and so on and so forth…..Hope this bridges the calculation gap we seem to be having..

    • Niwo

      September 1, 2018 at 8:57 pm

      Can I buy Treasury bill for 5years or more?

    • Kalu

      September 28, 2018 at 11:48 pm

      Hello Frank.. pls help out. i just contacted Zenith and Sterling customer care respectively asking them for the rates of treasury bills

      Response from sterling is that the returns are 10.5% per 91 days and 11.6% for 182 days

      Response from Zenith is tha the returns are 11% per 91days and 12 + % for 182 days

      Naive me thinks this implies if i today invest 100k for 91 days to TB through Sterling i should be able to make a profit of N10500 after 91days

      is this calculation correct?

  51. Tokunbo

    September 7, 2018 at 2:07 pm

    Thanks bro, I went though your patient to reply all questions. Pls which one will you advice a starter like myself. I actually have mutual fund in mind before I ran into your writeup. Mutual Fund or Treasury Bill

  52. Tobechi Onyekweli

    September 20, 2018 at 10:41 am

    Please when you say interest is paid ‘upfront’ does that mean u can cash out on the interest or you have to wait till maturity before you access the interest along with your principal?

  53. Oge

    October 6, 2018 at 1:10 pm

    Please, can you clarify what you mean by “Minimum Average Bid Rate”, as I’m struggling with the word “Minimum”? Are there several averages computed and how?

  54. Pat

    October 15, 2018 at 11:20 am

    Pls, I want to get a clearer explanation on TB investment as regard what I was told in the bank. Rate × value ÷ 365 × tenor ???

    • Anonymous

      December 10, 2018 at 11:29 am

      yes that is how it is calculated

  55. Kemi

    October 19, 2018 at 7:55 am

    Can I buy TB even when not in Nigeria, though I can operate my account from outside the country through mobile banking

    • Alfred Akuki

      October 19, 2018 at 12:15 pm

      Hi Kemi, Sterling bank I-Invest can actually provide you with that option. Visit bit.ly/i-invest_ng

  56. Ajoke

    October 20, 2018 at 10:12 am

    Pls, how do I get or calculate a favorable bid rate since I read up there that the banks bid rates are usually not the best?

  57. Alex Ikpotor

    December 8, 2018 at 2:44 pm

    Can I buy TB from any bank outside my bank,if their interest is higher than that of my bank. Also wants the disadvantage of such transaction if any.

  58. Amah Emmanuel

    December 24, 2018 at 7:19 pm

    Please help calculate this for me, if I invest 4 m. At interest rate of 10% for 364 days, what will be my interest?

  59. Tunde

    January 14, 2019 at 5:09 pm

    Nice article from everyone that contributed.

  60. Chung Bitrus

    January 15, 2019 at 5:08 pm

    Good day sir, I went to first bank several times in the last five years asking for FGN Bonds or TBs to buy, but the keep telling me the haven’t received signal for it, or a times there is nothing like that . please help me I am a student. Again, is it preferable through Bank or through a stock broker?

    • Nonso

      May 25, 2019 at 6:37 am

      Go to sterling bank and use the i-invest app spoken about by the author of this article. I-invest app can be found in your android playstore. Then go to sterling bank for further explanations before you actually invest. They partner to own the app

  61. Akeredolu Olubukunmi

    February 1, 2019 at 12:34 pm

    If i invest a hundred thousand for one year, how much interest do I get back and how would the interest be paid?

  62. Anne

    February 1, 2019 at 12:53 pm

    If I invest 100k by march 2019 and I want to invest it for 2 years, is adding 100k per month to the initial 100k possible?? And how much will the interest be at the end of 2 years.
    Thanks

  63. skippo

    February 9, 2019 at 1:25 am

    If i invest 25m with 3 month tenor, what is ROI ? Thank u.

  64. Paul levi

    February 22, 2019 at 12:56 pm

    I want to invest in treasury bill please where can I get it is it in central bank or my Bank

    • Onome Ohwovoriole

      February 23, 2019 at 8:51 am

      Good Afternoon. You can try your bank or any asset management firm.

  65. Paul levi

    February 22, 2019 at 12:57 pm

    Please where can I get it

  66. Anonymous

    March 23, 2019 at 11:44 am

    Very nice write up thank you so much.

  67. Kerri

    March 26, 2019 at 4:24 am

    Ƭhis pparaɡrapһ is truly a ցood onee it helpps new
    web users, who are wishing in favor оf blogging.

  68. Iyma

    May 29, 2019 at 5:18 am

    Nice write up, Thanks. From all I have read above its almost very close to fixed deposits. Which will you advise?

  69. Tony

    August 15, 2019 at 3:21 pm

    I had some awkward experience with First Bank. I invested #20million in treasury bills at a rate the bank officer advised me for 182 days. My account was debited for 20m on a Monday and after about two weeks my principal amount was returned to my account. When I inquired about it I was told that my bid did not succeed. Please explain what ciuld have happened.

    • Alfred Akuki

      August 15, 2019 at 4:17 pm

      Hi Tony, it means your stop rate or bid rate was above CBN’s accepted margin.

  70. Akam Ebolom

    October 10, 2019 at 11:57 am

    Thanks very much I have been looking for an article like this how the Treasury bill department really operate right now I have to contact my bank.

  71. Chijioke

    October 11, 2019 at 2:08 pm

    I appreciate this article.
    can one loss part of the capital or the whole capital invested on TB ?

  72. Olamilekan famoroti

    October 14, 2019 at 6:59 pm

    Please enlighten me more on this treasury bill.what’s the actual things I must buy and sell??

  73. Olamilekan famoroti

    October 14, 2019 at 7:03 pm

    If I invest 10k on treasury bill what will be my interest??

  74. Olokesusi Bukola

    October 15, 2019 at 6:24 pm

    can i have more to learn please?

    • Aderemi Adegbite

      November 13, 2019 at 6:23 pm

      1. Kindly give me your phone number
      2. I applied for TBill through GTBank, I got an acknowledgment mail that it will be treated. Unfortunately, as at now Wednesday 13th November, my money is still in my account
      3.what can I do not lose out
      Kindly advise
      Thank you

  75. Olokesusi Bukola

    October 15, 2019 at 6:25 pm

    nice .wish to learn more.

  76. Kenneth G Segun

    November 1, 2019 at 4:42 am

    Thanks for the article.
    I bought treasury bills through two different fund managers. One of the investment letter that i received after purchase has this statement – ”please note that the treasury bills are held on your behalf in our books”. The other has – ‘the treasury bills are held with our custodian – Stanbic Nominees Ltd in line with SEC requirements”. If any of these fund managers go under, where can i tender these documents to claim my money?

  77. Kunle Rasaq

    November 7, 2019 at 8:17 am

    I invested one million naira in the primary market of treasury Bill Oct 30th 2019 for 1year, FGN/CBN discount rate was 12.92% for 365days but my investment bank only gave me N11.3% (N113,200),with the claim that I demanded for upfront payment and that I can only get N129,200 if I do not collect upfront, please is this correct ?.

  78. Oyetoro helen

    November 20, 2019 at 8:41 pm

    What’s the lowest amount I can use to buy T.B

  79. Ify

    November 22, 2019 at 5:05 pm

    pls reply my questions, it’s very urgent. thanks

  80. Walter Ub

    December 11, 2019 at 10:43 am

    Hi nairametric,
    Please how can i know the current interest rate of Tbs at any point in time?

  81. Bolab

    December 25, 2019 at 12:35 am

    Please help to clarify what the current ban on TB means. If one is unable to buy TB through banks, what are the other options to invest?

  82. Nice

    January 19, 2020 at 1:01 am

    My question is, if I invest 100k with a percentage of 10% for a year, my return investment is just 10,000?
    Or is more than that??

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Editors Pick

DEVALUATION: CBN updates website to official rate of N360/$1

The central bank of Nigeria has devalued its official exchange rate from N307/$1 to N360/$1.

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CBN website states oil price is still $61, Naira under pressure as Nigeria records poor export earnings, 4 key sectors the CBN plans to pump money into

Just as Nairametrics reported, the Central Bank of Nigeria has devalued its official exchange rate from N307/$1 to N360/$1. The apex bank has now reflected this change on its website signaling a confirmation. The bank is yet to issue a press release to this effect.

The CBN has now officially devalued by 15% moving from N307/$1 to N360/$1. Depreciation at the “market-determined” I&E window is 5% having moved from N360/$1 to N380/$1

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Devaluation: Nairametrics reported yesterday that the Central Bank of Nigeria (CBN) sold dollars to banks at N380/$1 in a move signifying a devaluation of the currency. Banks trading at the Investor and Exporter (I&E) window bought dollars at N360/$1 from the CBN on Friday, March 20, 2020. The I&E window is the official market where forex is traded between banks, the CBN, foreign investors, and businesses. The central bank typically buys or sells in the market as part of its intervention program.

The CBN has updated its website with the official exchange rate.

Nairametrics also got hold of a letter from the CBN to banks informing them of the new exchange rate for dollars flowing from the International Money Transfer Operators (IMTOs). According to the CBN, IMTOs will sell to banks at N376/$1 while banks will sell to the CBN at N377/$1. The CBN will sell to BDC’s at N378/$1 while the BDC’s will sell to end-users at “no more than” N380/$1.

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Single Exchange Rate: A report yesterday also suggested that the CBN also planned to move to a single exchange rate policy for determining the price of the dollar. A senior central bank official who does not want to be identified, said, ‘Today we allowed the rate at the importer and exporters (I&E) window to adjust in response to market developments.’

The central bank has now made an apparent u-turn after it had initially that the “market fundamentals do not support naira devaluation at this time” detailing reasons why it did not need to devalue.

Falling oil price: Oil prices fell to under $20 on Friday before climbing back up to settle at $23 per barrel. Nigeria’s Bonny light trades at $26 while the benchmark Brent crude trades at $29 per barrel. In response to the crash in oil price, Nigeria’s announced a cut to its 2020 budget by N1.5 trillion as it faced the reality of a potential drop in its revenues. Nairametrics also has information that state governments are getting jittery about their ability to sustain salary payments as a reduction in their federal allocation “FAAC” is anticipated.

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Career tips

Investment options for salary earners

Investment options for the salary earners
#Investing #Entrepreneurs #Investment #Salary #Wages

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Investment options for salary earners - bank loan

Recently, one of the readers of my articles asked to know what investment options are open to salary earners. A salaried individual is like everyone else except that he or she has a fixed monthly income. This implies that their investments and expenses have to be managed strictly according to their fixed monthly income.

Since salary is assumed to be the only source of income for the salaried, it is advisable that such an individual fortify himself financially before investing so that adverse investment performance will not have untold effect on him and his family. Therefore, if you are a salaried prospective investor, you need to:

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Get life insurance

Most families in Nigeria are single income families so much such that if anything bad happens to the income earner, the family gets shattered, at least financially. Again, given the risks inherent in capital market investments, it is only prudent to have a life insurance as a first step in one’s investment journey. It is very baffling to see many investors very deep into the market, yet they do not have life insurance.

[Read Also: Understanding the risks in bond investing]

Life insurance is and should be a basic part of any financial plan. Life insurance is a protection for loved ones against financial hardship arising from the death of a breadwinner. This is even more important today than ever before with high cost of funeral expenses, college education and medical bills. So, the first investment option for a salaried individual is to get a life insurance.

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Prepare for financial emergencies

Life is full of surprises, emergencies do happen, jobs are lost without notices, and even good investment opportunities emerge sometimes suddenly. There is, therefore, the need for a cash reserve to help weather the financial storms and emergencies when they come calling.

Cash reserves do not only provide for emergencies, they also help to ensure that investments are not liquidated prematurely or at inopportune times to cover unexpected expenses. There are no hard and fast rules on what the exact amount of the required cash reserve should be, but most financial experts and planners will advise that an amount that equals about six months of living expenses be set aside.

So, as a salaried person, your next investment should be to have a cash reserve. A cash reserve should not necessarily be in a savings account or under the mattress; it could be in an interest-bearing money market account, money market mutual funds with low to zero luck-up period or another form of very liquid investment that is readily convertible to cash without loss of value.

[Read Also: Understanding the risks in bond investing]

Know your risk appetite

As a salaried and fixed income individual, your risk appetite is most likely going to be low as well as your risk tolerance, although your extended family profile could change all that. You need to know or understand your risk tolerance before you engage in any capital market investment.

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Your risk tolerance will and should drive the type of investments you go into. Your risk tolerance depends on your psychological makeup, your current insurance coverage, presence or absence of cash reserve, family situation, and your age among others.

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Talking about family situation, it is reasonable to think that a married individual whose children are still in school will be more risk averse than an unmarried person. On the other hand, older people have shorter investment time horizon within which to make up for any losses. the reason for this is because the older you get the less time you have to work to recoup on losses.

In that case the risk tolerance of an older man will be less than those for younger folks. Again, the more cash reserve and insurance coverage you have, the more your propensity to take risk. Now having known your risk tolerance based on the underlying factors, you can then define your investment objectives

[Read Also: Important tips on how to profit in a bearish market]

Set your Investment objectives/goals

Having met those essentials above, you are now ready for a serious investment plan or program. A good investment plan starts with investment objectives. Investment objectives are the force that determines what you invest in. Investment objectives range from capital preservation, to capital appreciation and constant income generation.

Capital preservation as an investment objective implies that you, the investor, aim at minimising the risk of loss by maintaining the purchasing power of your investment. So, if you are risk averse or you will need money from your investment soon for children’s education or for building a house or you are nearing retirement, this should be your objective.

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Investors whose aims are to see their investment portfolios increase in real terms over a period of time are better suited for capital appreciation as an objective. This is better for investors that are more risk tolerant and those with more potential to recoup on losses along the way.

If you are already retired or nearing retirement, and therefore depend on your retirement plan supplemented by investment income, you need an investment that generates income rather than capital gains. In that case, your investment objective should be current income generation. It is always good to have investment goals stated in terms of risk and returns.

[Read Also: I-Invest generates over N2 billion transaction in less than 6 months]

Decide on asset allocation

Armed with the knowledge of your risk appetite and investment objective, you are now ready to decide on what to invest in, and how much to invest in any asset class. This takes you to asset allocation decisions. Asset allocation involves dividing an investment portfolio among different asset classes based on an investor’s financial requirements, investment objectives and risk tolerance.

A right mix of asset classes in a portfolio provides an investor with the highest probability of meeting his/her investment objectives. Asset allocation is the most important investment decision an investor can make in a portfolio because it demonstrates an investor’s understanding of his or her risk preferences and return expectations.

It is good to strive for a diversified portfolio. Unfortunately, the Nigerian market does not provide a lot of asset classes for optimal diversification, but diversification can be achieved across sectors or industries within the few asset classes in the Nigerian stock market.

Decide on how to invest

There are different ways to invest in the capital market. You can invest directly by making the stock selections by yourself, thanks to the online stock trading platforms that abound the world over. This implies that you have what it takes to conduct the required research and analysis of the companies whose shares or stocks you wish to buy.

[Read Also: How I Would Invest My Mother’s Retirement Funds]

It also implies that you have what it takes to know when to sell or add to existing positions. Another method is to have someone “do the heavy lifting” for you. In this case, that someone, often times called fund manager or portfolio manager, does the research and analysis and selects shares that suit your investment preferences, investment objectives, risk tolerance and appetite as well as your investment time horizon.

This route is most suitable for investors that lack the knowledge and time for the required research and analysis. If you decide to go this route, mutual funds are the best bet for you.

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Business News

Atiku kicks as Buhari spends $3.7 billion in foreign debt service since 2015

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Budget: FG completes just 31.7% of constituency projects, Nigerians react to President Buhari's signing of Finance Bill 

The Buhari led government has spent about $3.7 billion in foreign debt service since 2015, one of the highest from any democratically elected government. The highest single-year foreign debt service was in 2006 at $1.79 billion.

About 68% of Nigeria’s foreign-denominated debt servicing is in commercial Eurobonds issues over the last two years. The loans range between 5.1% and 9.2% per annum. Nigeria’s external debt stock stood at $27 billion in June 2019.

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Rising debt service: The Buhari administration has so far spent about $1.1 billion in foreign debt service this year. In 2018, the government spent about $1.4 billion in debt service, more than 3 times the $444 million it spent servicing foreign debts in 2017. The rising cost of debt service is a direct attribute of the government’s reliance on foreign loans as a means of funding government expenditure.

Debt service since 2003. Source: CBN. Nairametrics Research (C)

Foreign Loans: Nigeria’s fallen revenue following the crash in oil price has allowed President Buhari to rely mainly on foreign loans to fund government expenditure. As of June 2015, Nigeria’s foreign loans were about $10.5 billion mostly made up of multilateral and bilateral loans.

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However, by June 2019, total foreign-denominated loans were $27 billion with $10.8 billion made up of Eurobonds. Commercial loans which include Eurobonds and Diaspora bonds make now make up about 42% of total foreign borrowings.

[READ ALSO: Babatunde Fowler attributes FIRS success to technological innovation (Opens in a new browser tab)]

Critics of the government have complained about the government penchant for debts believing that it could put the future of younger Nigerians in jeopardy. Supporters of the government, however, believe the borrowing was necessary to invest in critical sectors of the economy particularly infrastructure.

Recently, Director-General of MAN, Segun Ajayi-Kadir expressed worry about Nigeria’s rising debt.

“….the rising debt profile of Nigeria continues to be a cause for concern, especially the capacity of government to effectively service it and, at the same time, meet the bursting needs and aspiration of the citizenry going forward.” 

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“Already, our budget projections for 2020 anticipates a debt service sum of 2.45trillion, an amount higher than the 2.14 trillion earmarked for capital expenditure. 

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“And even though our debt-to-Gross Domestic Product (GDP) ratio, which currently stands at 28 percent, is still below the average in Africa, our revenue-to-GDP ratio remains low.”

The Finance Minister Zainab Ahmed however, believes the current debt profile is sustainable, comparing it to our GDP.

“Currently, Nigeria’s debt is at N25 trillion; that is about $83 billion. And at $83 billion, we are just at 18.99%…so 19% debt to GDP. I hear people say Nigeria has a debt problem. We don’t have a debt problem. What we have is a revenue challenge and the whole of this government is currently working on how to enhance our revenues, to ensure that we meet our obligation to service government as well as to service debt.”

[READ ALSO: Babatunde Fowler attributes FIRS success to technological innovation (Opens in a new browser tab)]

Former Vice President and defeated PDP Presidential aspirant, Atiku Abubakar during the week piled criticism on the government’s borrowing.

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“I have said it time and again. The business of government is too serious to be left in the hands of politicians. We must all ask questions because if they throw away the future, it is not going to be their future they are throwing away, it will be all our futures.

“The fact that Nigeria currently budgets more money for debt servicing (N2.7 trillion), than we do on capital expenditure (N2.4 trillion) is already an indicator that we have borrowed more money than we can afford to borrow. And the thing is that debt servicing is not debt repayment. Debt servicing just means that we are paying the barest minimum allowable by our creditors.

What this means: Nigeria’s rising foreign debt profile should be a worry to investors and businesses and must be watched closely. The country’s ability to repay these loans will continue to be harder as it increases especially now that it is costing about 9%. The immediate risk for investors is the exchange rate which could be the first to suffer should the government struggle to repay its loans.

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